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The VA Loan program is the most powerful home loan program on the market for many veterans, service members and military families.

These flexible, government-backed loans come with significant benefits that open the doors of homeownership to veterans who might otherwise struggle to obtain financing.

VA loans require no down payment or private mortgage insurance. They feature competitive rates and terms and allow qualified borrowers to purchase a home with little to no money out of pocket. The increasing popularity has stemmed from the loan program's signature benefits, which include:

1. No Down Payment

Saving money and building credit can be difficult for service members who are constantly on the move. With the VA Loan, qualified borrowers can finance 100 percent of the home's value without putting down a dime. Take a look at the chart below to see how much you can save through the no-money-down benefit of the VA Loan.

VA Loan Savings at Closing:

Loan Amount

0% Down

5% Down

10% Down

20% Down

$150,000

$0

$7,500

$15,000

$30,000

$250,000

$0

$12,500

$25,000

$50,000

$350,000

$0

$17,500

$35,000

$70,000

$450,000

$0

$22,500

$45,000

$90,000

2. No Private Mortgage Insurance

Many conventional lenders require borrowers to pay private monthly mortgage insurance unless they're able to put down at least 20 percent of the purchse price.

That can add up to a lot of cash and can be a stretch for many veterans!

Private mortgage insurance (PMI) is an insurance that protects lenders in case of a borrower default.

With a VA Loan, however, there is no PMI.

This is because the federal government backs all VA Loans and assumes the risk on behalf of the borrower that is typically covered by the PMI.

This VA Loan advantage allows you to build more and more equity in your house, effectively saving you thousands of dollars over the life of your mortgage.

PMI Savings per Month: (NO Private Mortgage Insurance on VA Loan)

Loan Amount

Monthly Savings

$150,000

Save $115/mo

$250,000

Save $191/mo

$350,000

Save $268/mo

$450,000

Save $345/mo

3. Competitive Interest Rates

Interest rates on home loans are based on risk assumed by the bank to finance the loan. Because the VA backs each VA Loan with a guaranty, financial institutions carry less risk and can offer interest rates that are typically 0.5 to 1 percent lower than conventional interest rates.

Pair that lower interest rate with the ability to purchase a home with no money down and no private mortgage insurance and the savings start adding up significantly.

Lower Interest = More Savings:

Loan Amount

$150k

$250k

$350k

$450k

Savings from a 0.5% reduction in interest

$14,760

$24,480

$34,200

$43,920

Savings from a 1% reduction in interest

$28,800

$48,240

$67,320

$86,400

(Assumes 10% down on loan; see additional notes at bottom of page)

Additional Benefits

Basic Allowance for Housing

Basic Allowance for Housing (BAH) is a significant benefit for qualified active military members. Lenders can count your Basic Allowance for Housing as effective income, which means you can use BAH to pay some or all of your monthly mortgage costs.

BAH varies based on your pay grade, your geographic location and your number of dependents.

No Pre-Payment Penalty

With many different types of loans, paying off a home loan before it matures results in a pre-payment penalty.

This is because lenders miss out on additional opportunities to collect interest payments. The pre-payment penalty is a way for financial institutions to recoup some of that money.

The VA Loan allows borrowers to pay off their home loan at any point without having to worry about a pre-payment penalty. With the absence of a pre-payment penalty, borrowers are free to consider future home purchases and refinancing options.

Please contact Kathi with any questions - Sure hope to help you find a perfect home and if you are going to use your VA loan eligibility, I can help - over 28 Years of Military Buyer and Seller Experience!

Recommendations

Kathi Olmstead was a great help to us. Her experience, determination and commitment to get our homes sold asap paid off. We followed her suggestions on the presentation of the home, and within just 8 days of showing a offer came in that was better than expected. We were able to move out of Alaska before the winter season moved in. She was always helpful with all our questions and concerns. She also was able to sell my sisters home in short order. We do recommend Kathi very highly. Thank you.Dan and Cathy Wagner

Kathi was very easy to work with and worked really hard to get us top value! She was always available for questions and was very quick to offer great advice on the entire process. Our house sold in less than 2 days! I would highly recommend her.Nick and Carleigh Chacor

Kathi and her team are terrific! When I approached her I was in a hurry to sell my place and I thought I would list it for slightly more than what I paid for the place- I had barely lived there 3 years. But Kathi knew the market and listed my home for approximately $25,000 more than what I paid. This is the point where I should mention I made zero upgrades or improvements to the home. That first week, I called Kathi several times. I was anxious and I thought the list price was too high. Kathi reassured me. The 2nd or 3rd week, I got a full price offer! I would highly recommend Kathi and her team to all Alaskans looking to buy or sell a property.Kimberly Slone

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Listing information last updated on 2018-08-14 12:51:52